Yesterday I gave a presentation to a NED Forum event sponsored by Investec. It covers a topic that I think is one of the most important issues for CEOs and Boards today who continue to grapple with the challenges of COVID.
The 3 key objectives for the presentation were to:
- Better understand what are some of the key and complex forces at play in organisations due to COVID
- How organisations can be more adaptable and resilient to future disruptive change
- And how to do this with more humanity using some best practices of a growing new breed of organisations out there
You can view the presentation here or below including the REIGNITE! 2020 Report:
For those interested on more detail, below I have pasted in snippets of the talk including the Introduction.
Enjoy!
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Hello and welcome everyone. Thank you to The NED Forum and Investec for the opportunity to speak here today. My name is Andrew Essa, and today I’m going to cover a topic that I think is one of the most important, if not THE most important, issues for CEOs and Boards today.
And that is:
Not just about turning this COVID crisis into an opportunity
Not just about where CEOs should focus, or where to invest
And not just about what winning strategies to implement to outmanouevure the competition
But more about HOW to do all of this in a way that is also more humane, more trusting and less bureaucratic, and in a way that can unleash the potential and creativity of people to have more impact and more fulfilling work lives
So we will aim to do 3 things here today:
- Better understand what are some of the key and complex forces at play in organisations
- How organisations can be more adaptable and resilient to future disruptive change
- And how to do this with more humanity using some best practices of a growing new breed of organisations out there
Slide 2 – Gary Hamel quote
- So to bring this quote which I love and also my ‘fascination’ with this topic – I’ll tell you a quick story about ABC Learning Company, based here in Gsy.
- Obviously that is not their real name but I came across them in some research I did during Q2 and lockdown.
- In the research which later became the REIGNITE 2020 Report – which I’ll introduce shortly – there was so much devastation across sectors including travel, hospitality, retail, construction, manufacturing, and so on.
- In fact 50% of the 439 leaders surveyed were in total despair, in terms of closures, restructuring, uncertainty and so on.
- However…there was a glimmer of hope!
- About 10% of businesses were doing extraordinary things. They were using the crisis as an opportunity to reset, rethink, and reinvent. They were pivoting, quickly using technology to launch new offerings, testing new business models, and at the same time becoming more efficient, productive and reducing costs.
- In terms of ABC Learning, it was a typical lifestyle business providing high school tutors, owned by one person with 5 tutors on the payroll. No online presence, web-site or anything. Business stopped overnight with lockdown, but by rethinking things quickly and using simple online and digital tools – google spreadsheets for CRM and bookings, zoom for delivery of live sessions, stripe for online or over the phone payments, the owner was not only able to quickly survive but doubled revenue during lockdown, hired 10 more tutors on contracts, and created a scalable solution which allowed for recorded training on-demand on popular topics. So better CX, more revenue and profits.
- So what is interesting here is the combination of human psychology and business strategy during a crisis: so how did the leader reinvent whilst everyone was retreating, what can we learn, and how can we emulate this for our own contexts
- This is what underpins today’s talk and certainly the REIGNITE 2020 Report which I’ll introduce shortly.
Slide 5 – The Modern Org is Under Attack
- So the modern organisation is clearly under attack from so many angles.
- The pace of change now is exponential and only will increase as further technological convergence happens through digital, AI, automation, analytics and so on
- Today’s orgs look and feel very similar to how they have always been – command-control, top-down consistency, coordination and standardisation- which is the classic bureaucracy
- In US 1983-2019 the bureaucratic workforce – managers and overhead – has doubled in that time-frame VS growth of 50% in all other job categories
- At same time productivity per OECD has gone down since them
- Mental health, burnout, anxiety, stress, bullying, politics, discrimiation, harassment etc has skyrocketed
- Do we know anyone who is a leader, manager or worker and genuinely feels inspired, trusted, valued and engaged by their organisation every day??
- We can’t afford it anymore!
- So the question becomes, is it possible to build organisations that are big and fast, disciplined and empowering, responsive to market shifts yet resilient, efficient and entrepreneurial, and bold and prudent?
- Many examples of new breeds of organisations successfully operating with 1/2 of bureaucratic load of traditional org
- Case study – Buurtzorg (page xi)
- Dutch firm Birdszaard home-health employers 16,000 nurses and home-carers with 2 line managers with a span of control of 1-8000!
- They do this with dividing into small teams, give them the data they need to be self-managing, connect with a social platform to collaborate to solve problems and collaborate and share best practices, hold deeply accountable with P&Ls
- Gives all the advantages of bureaucracy with control, consistency and coordination with no drag or overhead
On Digital Business:
- Speed and scale: Digital and cloud has enabled adaptability at speed and scale;
- The crisis has shown that rapid change at speed and scale is possible using digital and cloud in the short-term.
- Increased adoption: Increased adoption of back-end cloud and front-end productivity tools, from e-signature to VC to MS365 to Dropbox etc
- Effectiveness and benefits: Focus now on what is working, what isn’t, benefits realisation, productivity, efficiency, training,
- Complexity: So much going on…..managing capacity, cybersec, managing the complexity of the new IT estate, ensuring greater resource allocation with 2021 budgets, investments and leadership commitment to that
- Scaling and Transformation: The best firms – probably not many – are:
- firmly putting digital at the centre of corporate strategy
- looking whether to build vs buy
- aligning leaders on digital acumen so every CXO is a Chief Digital Officer for their function
- looking at wider opportunities for upskilling and digital adoption across the firm – so beyond infrastructure into more advanced worker productivity tools – automation, AI, analytics, superior Customer Experiences, New Business Models and Products/Services, Ecosystem Collaborations/Ventures
- As well as more strategically, how to better organise and transform to become a digital business
- Caution! Digital laggards will get left behind due to external forces and competitive intensity
On Trust + Safety:
- So this is such a critical, complex and often overlooked dimension, mainly as it requires leaders to be empathetic and emotionally intelligent, and unfortunately many aren’t
- The BIG opportunity is that for the firms who get these complex dynamics right, will differentiate themselves from a talent retention and hiring perspective and become the new employers/brands of choice 2021+
- But first we need to look at the state of play before COVID
- In a nut-shell, there is very little trust, just need to look at amount of oversight, rules, policies, rule-choked processes and employees get this and know they aren’t trusted and even that their managers don’t think they are very capable
- UK amount of discretion people have in jobs has been going down in last 20years
- Only 1 out of 5 believe their opinions matter at work
- Only 1 in 10 have the freedom to experiment with new solutions and methods
- Most people can buy a car or house but same people in organisations can’t order a better £150 work chair without going through crazy internal hoops and hurdles
- The way organisations are organised it is a caste system of managers and employees of thinkers/doers which causes disengagement of people from their work
- Gallup surveys show only 20% of those highly engaged in their work – this is ALARMING so something needs to change
- So against that backdrop you introduce a health and economic crisis of proportions never seen before, which impacts the human psyche in many different ways, and for most orgs you have a widening trust gap
- Key impacts:
- The “psychological contract” between employer/employee has also shifted for many
- Traditional work assumptions have been challenged, firms must now not assume ‘old’ practices were the right ones
- Acceleration of complex issues around safety, mental health, inclusivity, belonging, empathy, EQ, culture and behaviour, power dynamics, and expectations on leadership styles
Andrew Essa 
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